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When we looked at Netflix as a core stock for your portfolio back in September, it was a somewhat dividing pick. Some investors didn't like the P/E ratio sitting north of 57 times trailing earnings, and others questioned how many subscribers could be interested in a supposedly low-quality catalog of streaming titles. Fellow Fool Anand Chokkavelu even posits that Netflix should be high on your sell list in 2011.

Yet here we are, four months and not one but two blowout earnings reports later, and Netflix looks more expensive than ever -- and just as promising. CEO Reed Hastings engaged in a much-publicized exchange of salvos with famed superinvestor Whitney Tilson over the wisdom in shorting the stock, and Hastings has so far been proved right.

The big question for Netflix is not how quickly Coinstar(Nasdaq: CSTR) might nibble away on its subscriber base with Redbox rentals. The two companies are shooting for the same customer demographic, yes, but in entirely different ways -- a head-to-head rivalry is nearly nonexistent, as we saw when Coinstar misjudged the holiday quarter badly while Netflix cruised right on through to reach 20 million subscribers.

It probably irks Time Warner(NYSE: TWX) CEO Jeff Bewkes to no end that he can't even kill Netflix by raising license prices on his library of movie and TV content. Before too long, Time Warner's HBO may have to become a Netflix partner rather than the heated rival it's positioned as today. And I wouldn't be surprised to see Hastings finding a way to make that partnership profitable for everyone involved -- including HBO.

Netflix has proved many times over that its streaming-media model works, and it will continue to do so in the coming quarters and years. It's fine if you're a skeptic, but I would still advise against selling Netflix short -- it tends to be bad for your portfolio's health.

Want to read more about Netflix? Add it to My Watchlist, which will find all of our Foolish analysis on this stock.